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Intentional Acts and Weapons Liability

There is nothing new about a business owner keeping weapons under the store counter or in the vehicle used to take deposits to the bank. The laws, however, raise questions about liability insurance for weapons-related incidents, so it’s a good time to brush up on coverage issues.
There are at least three ways an insured can injure someone with a weapon:
Accidental discharge of the weapon,
Intentional shooting with an intent to injure the person (shooting a criminal), or
Intentional shooting with accidental consequences (shooting an innocent person standing behind the criminal).

There’s no coverage problem with the accidental discharge. The commercial general liability policy covers the insured’s legal responsibility for bodily injury or property damage to others as the result of an accident. Costs for defense and payment of any subsequent judgment or settlement are provided.

For the other two types of incidents, however, the intentional acts exclusion in the policy presents a problem for the individual or commercial insured seeking defense or indemnity following a shooting incident.
The intentional acts exclusion in the CGL policy reads as follows:

2. Exclusions

This insurance does not apply to:

a. Expected or Intended Injury

“Bodily injury” or “property damage” expected or intended from the standpoint of the insured.

This exclusion does not apply to “bodily injury” resulting from the use of reasonable force by an “insured” to protect persons or property.

Most courts have treated this exclusion narrowly, so that not only must the action which causes the damage be intentional (striking a difficult customer), but the damages must be reasonably expected (broken jaw vs. paralysis). In an auto-related case (Tanner vs. Nationwide), the Texas Supreme Court said a similar exclusion in the personal auto policy is “effect-focused and cause-focused, voiding coverage when the resulting injury was intentional, not merely when the insured’s conduct was intentional.” According to the decision, if the exclusion were to preclude coverage for reckless acts that didn’t result in deliberate injury, insurance coverage would disappear for many accidents.
The exclusion applies to “the insured” who intentionally causes the damage, and not to all insureds who may be sued as a result of the damages. Thus, the named insured business would be protected in a suit brought by a customer who was intentionally injured by a third party or an employee of the insured.

The exception to the exclusion applies to bodily injury only, and permits the use of “reasonable force” by the insured to protect persons or property, such as when a store owner grabs a customer suspected of shoplifting or shoots a burglar or robber, and the customer or criminal later sues the insured as a result.


Cyber Checklist for Risk Managers

checklistIf the value of personal information makes us vulnerable, the value of health care information exponentially expands the bullseye. According to Reuters, medical records are worth up to 10 times more than credit card numbers on the black market.

As a health care organization, it is our responsibility to protect the integrity of our patient’s records, and we take this responsibility very seriously.

All too often the effort has been focused on preventing and managing massive cyber-attacks. However, it is critically important that we be mindful of the exposure the individual employee represents in our cyber security.

This could be the employee who inadvertently faxes data to the wrong person, leaves their computer unattended and at risk, or the employee who intentionally sets out to hurt the organization as a retaliatory measure.  This is a real exposure that is often overlooked.

It’s important that you act in lock step with network security and organizational teams in order to detect, stop, and address the untoward event appropriately.  Cyber threats can be overwhelming and a contributor to sleepless nights.

To help us break this threat apart into manageable steps we have created a checklist for the risk manager.

Checklist for Risk Managers

    • Work with board and executive leadership to ensure support for cyber initiatives.
    • Provide for strong data breach identification and management policies and procedures creating a zero tolerance culture for data breaches.
    • Ensure that education and training occurs at all levels of the organization at least annually to include basic definitions, policy content and zero tolerance culture.
    • Create a breach response team in partnership with Organizational Integrity, Finance, Legal, Risk, IT security, Human Resources, and Communications to ensure are all working together for immediate detection, response and action when a breach occurs.
    • Negotiate a robust cyber insurance policy that has breach response, liability coverages, as well as coverage for regulatory actions, fines, and penalties.
    • Create data breach preparedness planning opportunities.
    • Leverage insurance carrier for education and loss prevention opportunities.
    • Appreciate the regulatory landscape through education and training.
    • Develop contracts with external partners including forensic firms, law firms, and public relations firms to assist during a large breach event.
    • Train, test, revise, train, test, and revise!

The answer to many cyber threats is having the force of an integrated cyber security and breach response team as your shield.

Your Cyber Security Rests on Your Weakest Link and Your Lawyers

According to the Association of Corporate Counsel, “employee error” is the most common cause of data security breaches for employers.

Other common causes of security breaches included insiders stealing company data and phishing attacks.

The survey of 1,000 in-house lawyers for organizations in 30 countries found that most respondents anticipate that their role in cybersecurity, which was traditionally the domain of IT departments, will increase in the coming year.

However, only 10 percent of lawyers surveyed said they have a budget for addressing cybersecurity. Although half of respondents said their organizations carry cybersecurity insurance, only 19 percent of those who experienced a breach said their insurance policy fully covered their losses.

According to the report, health care is the industry most at risk for a cyber attack, followed by insurance and manufacturing/retail. Nicole Hong “Employee Error Leading Cause of Data Breaches, New Survey Says,” (Dec. 9, 2015).


Attorneys are becoming more involved in data security, as this survey shows, because cybersecurity is a legal and liability issue as much as an IT issue.

When personal information is compromised as a result of poor cybersecurity, customers, employees, or other victims can file a class action lawsuit against the organization for jeopardizing their confidential information. As more class actions occur, so will legal involvement.

Data breach lawsuits can be extremely costly. One of the most notable recent cybersecurity failures was the 2013 Target breach of up to 110 million customers’ credit and debit card information. In 2015 Target settled a resulting class action lawsuit for $10 million. In addition, Target agreed to reimburse thousands of financial institutions as much as $67 million for costs incurred from the breach.

In 2013, health insurance company, AvMed Inc., agreed to pay $3 million to settle a class action lawsuit for maintaining inadequate data security because of the 2009 theft of laptop computers containing the personal information of 1.2 million customers.

Although attacks by international hackers garner more attention, this report shows that employee negligence actually poses the greatest risk to an organization’s cybersecurity.

In order to protect data security, employees should receive training in the following:
1. Mobile device security, including never leaving mobile devices unattended in public and physically locking them in the office when not in use;

2. Malware prevention, including regularly scanning computers for malware;
3. Identity theft, including not sharing personal information on email or insecure websites;

4. Phishing, including never clicking on links in an email;

5. Passwords, including how to create strong passwords by using pass phrases; and

6. Wi-Fi security, including never using an insecure public network to send confidential information.

Wage & Hour Alert

wage-and-hourThe law firm Seyfarth Shaw LLC reports that cases under the Fair Labor Standards Act (FLSA) rose 7.6 percent in a 12-month period, continuing a trend. The firm expects the number of cases to top 9000 in 2016.

FLSA matters include charges for failure to pay; failure to pay minimum wage; misclassification; and child labor. Although raising the minimum wage receives the most media attention, the greatest risk for employers in 2016 is misclassification.

Misclassification includes classifying non-exempt employees as exempt and classifying employees as contractors. Misclassification has the attention of the DOL, the IRS, and the trial bar.

The DOL argues that misclassification is a form of wage theft. The IRS argues that misclassification is tax theft. Trial lawyers take misclassification cases because they are easy to prove and have large damage awards. The common theme of all three parties is they want employers to pay more.

Employers argue that they are simply doing what was allowed in the past before the litigation storm, but that argument falls on deaf ears, including those of federal court judges and juries.

The Seyfarth announcement states that some federal courts have made it easier for trial attorneys to certify classes of employees for FLSA matters. Opposing class certification successfully was one way defense lawyers could stem the litigation tidal wave. With that slowly eroding away, one can expect more wage and hour class actions. “Federal Wage and Hour Lawsuits Up 8%, To Record High, Firm Finds,” (Nov. 24, 2015).

Adding to the mix, 2016 is an election year, and the Obama Administration’s DOL has stated its plans to make changes before it departs.

Already promised by the DOL, but delayed, is the moving of the threshold for payment of overtime from $23,660 to a proposed $50,440. In general terms, any employee making less than the proposed $50,440 is due overtime no matter their position or job duties. This change will be fundamental and will impact every employer, especially small and rural employers and start ups that do not have the capital to pay hefty salaries, but need work hours to get a business off-the-ground.

The hits keep coming for 2016 with the July 15, 2015, DOL Administrator’s Interpretation No. 2015-1, The Interpretation will make it more difficult for employers to classify workplace participants as contractors. The recent popularity of the new Uber work model and the use of contractors to avoid paying benefits, like the mandates of the Affordable Care Act, has many in Washington concerned. According to the DOL, misclassification leads to lower collection of tax revenue.

Although not a certainty, there is talk that the DOL will narrow some of the exemptions for 2016. If that does happen, it will also increase overtime exposure for employers.

The result of these judicial and regulatory changes is a wage and hour tsunami that will begin in 2016 and that could crest in 2017 or 2018 unless legislative changes are made. Until then, employers need to start filling their sand bags and prepare because 2016 will be a year of wage and hour change.

Insurance Lies Most People Believe

Myth-vs-FactMyths, legends and lies are hard to dispel and correct, especially when doing so appears to financially harm the teller or believer. If the myth is true, the teller/believer does not need to purchase the coverage on which the lie is based; but if the information is false, the insured is forced to make a business decision not previously required.

Belief in and dependence on an insurance lie can financially harm the insured far more than the additional premium necessary to cover the exposure masked by the myth. But be warned, exposing these, or any, insurance lies leads to charges like, “You’re only trying to make more money off me.” Or, “Well that’s not what ‘so-and-so’ told me.”

Remember, “so-and-so” being quoted is not the insurance professional; further, the mere fact that a multitude of people believe in a lie or myth does not change or alter reality.

Beyond the non-insurance “so-and-so’s” spreading these lies, there are also agents perpetuating some insurance myths. When insurance agents or other so-called “financial experts” put their seal on such harmful lies, correcting the problem is that much harder. Lack of knowledge or dependence on what the agent heard someone else say without checking the facts are the two main causes an agent might pass along false information.

Following is a short list of myths, legends and lies told by and believed by insurance clients. Some of these are the result of just plain ignorance (not stupidity, just lack of understanding); some are the result of an “expert’s” faulty advice; and a few are actually promulgated and spread by insurance professionals. The list is far from all-inclusive.

“If I don’t have anything, they (the plaintiff, lawyers and court) can’t get anything; you can’t get blood out of a turnip.”

Want to bet? The belief that an at-fault individual cannot be financially harmed because he doesn’t have much is one of the most insidious lies conceived by its originator. Future wages can be attached; possessions can have liens placed against them, etc. Many states don’t allow the court to take someone’s house in settlement, but the at-fault party will be unable to amass much beyond the house until the debt is satisfied. A lot of what can be done might be subject to state law, but the pound of flesh will somehow be exacted.

“There is no need to purchase liability limits higher than my net worth.”

A slightly smarter version of the above lie. A person’s net worth is the value of all they own minus all they owe; why should it be the magic number, that’s not all the attorney is going to ask the court to award. More than one individual with a net worth of $250,000 (for example) has lost a $1 million (or more) negligence suit. A key rule of risk management is, “don’t risk a lot for a little.” Umbrella and excess policies are very inexpensive, bordering on cheap, compared to the limits that can be purchased – invest the small amount of money in the large amount of protection.

“That’s why I buy insurance.”

The context of this statement indicates whether this is a problem. If the insured has done all he can reasonably do to avoid a loss or injury (to the point of maximum benefit without undue burden), then there is nothing intrinsically wrong with this statement. However, if this statement is made because the insured is unwilling to take any or very few steps necessary to reduce the potential for injury or damage to persons or property, then his attitude has morphed into a moral hazard. While this may not be a limits or coverage myth, it is a statement that should make the agent question whether or not this is an insured with whom she wants to do business. Additionally, claims submitted by such individuals may need to be viewed with an eye towards possible “irregularities.”

 “Corporate status will protect me from liability; I’ll just declare bankruptcy and shut down.”

Courts can and do pierce the corporate veil in small, closely held corporations. Not being able to provide legal advice (which is a disclaimer agents should provide), this is not to be construed as legal advice; but do not let a statement such as this one go by unchallenged. Governance and tax considerations should drive the choice of a legal entity-type, not protection against personal liability. A one- or two-man corporation can very likely expect to see the veil of corporate protection removed if the injury or damage is severe enough. Many insureds use this myth to avoid purchasing an umbrella or excess policy. As stated above, don’t risk a lot for a little; find court cases where the veil has been pierced and the affect on the owners.

“Insurance is all the same.”

This myth is the hardest to overcome. GEICO, Progressive, Allstate and others have effectively convinced individuals that insurance is all about price. Even insurance agents have contributed to this lie. My first phone calls as an agent began with, “I’d like to see if I can save you money on your insurance.”

Insurance should be about the protection provided not the cost. That is not to say the cost should not be considered, but you must consider the relationship you are building with your insurance carrier(s).

 “It’s better to pay small liability claims out-of-pocket rather than report them to the insurance carrier.”

Who gives this advice; lawyers, insurance agents or the guy down the street who feels like he got away with an accident without it affecting his insurance premiums? I myself was a party to one of these situations on my way to visit a client.

Traffic was stop-and-go and the guy in the truck behind me neglected to do the first part – stop – and he rear-ended my vehicle. Pulling off the road into a parking lot to avoid holding traffic up even more, we exited our vehicles to inspect the damage. The driver apologized and admitted he just wasn’t paying attention (first mistake); talking further he asked, “I wonder how much it’ll cost to fix your bumper?” As it happened, we had pulled into the parking lot of an auto body shop, so I said, “Let’s ask.” (This is absolutely true.)

I found a service tech, he made a phone call and said it would cost $565 for parts and labor. The guy who hit me said, “Let me go to the bank, I’ll get you the money.” Now, I had him give me his driver’s license to hold until he returned to assure he would come back (he offered me his son to hold, but I already have two kids and didn’t want to risk adding a third). Fifteen minutes later he returned with cash in hand, I had the body shop order the part and the bumper was expertly replaced and he has nothing on his insurance or driving record. I did advise him to let his agent know, and I’m sure he did so that same day – NOT.

This appeared to work to his benefit; but what if, after thinking about it for a day or two, I decided to make some money off this accident? Is there a chance I could have begun suffering from “non-specific soft tissue injury” and developed some pain that could have only been cured by a large cash settlement?

The answer is, yes. Once he received a letter from my attorney and tried to report the claim to his insurance carrier, could they have denied the claim? Based on personal and commercial auto policy provisions, yes the claim could be denied as prompt notice was not provided to the carrier as per the “Duties…” requirements.

Make sure you notify your agent. From there, it depends on the relationship between your agent and the insurance carrier. Business auto policies state that the insured must notify an “authorized representative.” Personal auto policies simple say “We must be notified.” It is not clear if “we” includes the agent – that question is answered in the agency/company contract.

“Statute does not require me to have workers’ compensation, thus you (a higher tier contractor) can’t require it either.”

Most states require an employer with one or more employees to purchase workers’ compensation. However, 13 states don’t require workers’ compensation until the number of employees surpasses a certain threshold (usually three, four or five).

Regardless, statute is the minimum requirement in a particular jurisdiction. A contract can place requirements on the parties to a contract more stringent than statute; contracts just cannot relieve parties of statutory duties (allow them to do less than is required by law). Thus, if a contract requires a subcontractor to provide workers’ compensation coverage, then work comp must be provided even if the subcontractor has less than the minimum number of employees required by statute.

“I pay him with a 1099. He’s an independent contractor, not an employee.”

IRS and insurance rules differ greatly regarding the definition of an “employee.” Paying someone with a 1099 might make the worker an independent contractor for tax purposes (it’s not that simple with the IRS either) but there are far more stringent requirements within workers’ compensation administrative procedures as to whether the person qualifies as an independent contractor or an employee. Anytime a business owner floats this potential lie (or misunderstanding), more questions are needed to ferret out the truth. Examples of questions include, but are not limited to:

Does the employer/contracting party control the worker’s ways and means (i.e. does the employer tell the contractor when to show up, how to do the job and when to leave, or is the contractor free to perform the obligation and come and go as he pleases?);
Are the tools and materials supplied by the employer/contracting party or the worker;
Does the independent contractor work for anyone else or is his sole or major source of income the contracting party; and
Does the “independent contractor” carry his own insurance?
The level of control is the deciding factor when deciding whether a worker is truly an independent contractor or a “de facto” employee (based on the totality of the control). Don’t allow belief that a 1099 is sufficient to avoid accepting responsibility for an injury to the worker.

“If a workers’ compensation injury is less than a certain amount, I do not have to report it to the insurance company.”

Well-meaning agents may have been the creator and perpetuator of this myth. First Report of Injury laws in some states do not require the state to be notified of an injury unless it surpasses a certain threshold. The labor department in one state, for example, does not have to be notified of an injury unless it exceeds $2,000 in medical costs or results in one or more days of lost work.

Based on those requirements, it sounds reasonable for an agent to tell an employer not to notify the insurance carrier of a small claim (the worker needed a few stitches and was back to work that afternoon). However, the law says only that the STATE does not need to be notified unless the injury surpasses that threshold; nowhere does it relieve the employer of its duty to notify the insurer. In fact, the workers’ compensation policy specifically mandates the employer to notify the insurance carrier of all work related injuries, not just those that must be reported to the state. The reporting requirements before a state  must be notified are those placed on the insurance company (or self-insured entity) not the employer. Employers must report all work related injuries “at once.”

Not only is this belief fallacious because of a misreading of the statute, it is also dangerous should an injury be worse than originally thought. Use the above employee as an example. He just cut his finger and had to get stitches, not problem. But suppose he develops blood poisoning leading to major complications later; the insurance carrier may hold a hard line and deny coverage for failing to comply with the policy provisions found in Part Four of the Policy (“Your Duties If Injury Occurs”). Belief in this lie could be very expensive.

(First Report of Injury requirements for all 50 states can be found in Appendix “E” of “The Insurance Professional’s Practical Guide to Workers’ Compensation.”)

“Flood insurance is only for those in ‘flood zones.’”

Every structure located in an NFIP-participating community is in a “flood zone;” your house or building just may not be in one of the more hazardous zones. This is really trying to say, “I don’t need flood insurance because I’m not in a special flood hazard area (SFHA).” It’s just not the correct terminology, but your agent needs to and must know the correct terms when discussing flood coverage. Further, being located outside a SFHA does not guarantee safety from flood loss. Approximately 30 percent of all flood claims are to properties outside of “high hazard” areas (Special Flood Hazard Areas).

EEOC Announces Record Collections In 2015: What Does This Mean For Employers?

inlandThe Equal Employment Opportunity Commission (EEOC) has released its 2015 numbers on collections and litigation for the end of its fiscal year that ended September 30th.

Here are the numbers:

* $525 million collected from employers;
* $356 million collected from private, state, and local government employers via alternative dispute resolution and settlements;
* $65.3 million collected on behalf of charging parties against employers via litigation; and
* $105.7 million collected from the federal government.

To determine the scope of the regulatory risk, the number to weigh the most is the $65.3 million. This number represents collections won in court against employers who defended themselves, rather than settling out of court.

The collections number on the federal government ($105.7 million) reflects the feds suing the feds. Remarkably, this means nearly one out of every five dollars collected involved the U.S. government trying to enforce the law on the U.S government.

The $356 million in settlements, mediation, conciliation, and other alternative dispute resolution is the highest dollar number, but this number includes money collected from employers (private, state and local government), that commit discrimination and settle to limit their loss, as well as from employers that settle to avoid the costs associated with litigation.

Of the settlements, it would be telling if the EEOC would provide a breakdown of how many of these settlements were under $50,000; did not include an admission of guilt; and did not require any changes in management practices. Based on my experience, I would guess most of the settlements are within these parameters, indicating nuisance value settlements…in other words an employer making a business decision to not litigate.

The EEOC states that less than 45 percent of conciliations are successful. That tells us that approximately 65 percent of employers and/or employees come to the dispute resolution table and refuse to give an inch.

Based on the numbers, you would assume that the EEOC would file a lot of cases on behalf of employees. Yet, only 142 lawsuits were filed during 2015 for discrimination. This is a small number, considering the number of employees in the United States is approximately 140 million. Even if some of the lawsuits were class actions, so as a percentage of the employed population, these are “struck by lightning” percentages.

Of the 142 cases, only 42 were high risk/high damage cases involving multiple parties or discrimination by policy (versus discrimination by treatment) and of these, only 16 were for systemic discrimination.

So, remember this percentage…0.158 percent. That is the percentage of suits brought by the EEOC for discrimination out of the 89,385 charges filed in 2015, and the percentage for high risk charges is even less.

That means if you are an employee who has suffered discrimination, your chances are pretty slim that the government will litigate on your behalf. You will have to do it on your own.

Note that the numbers collected in 2015 include charges brought in previous years, so the numbers need to be viewed as an estimate. Even so, one has to conclude that the collected amounts for the 2015 suits will be, by percentage, even lower.

As for employers, lets go back to the $65.3 million. If you add the $33.5 million collected from systemic discrimination settlements (just six percent of the overall settlement amount), this amounts to $98.8 million collected for jury verdict or employer-approved settlements for systemic discrimination (high risk cases). This constitutes less than 20 percent of the total EEOC collections.

The EEOC touts the numbers, claiming success in its efforts to eliminate discrimination. EEOC Chair Jenny Yang states:

This is a pivotal moment to renew our national commitment to combating discrimination. There is a growing awareness-across racial and ethnic lines-that we must do more as a country to address issues of equality. As we look ahead to the challenges that remain, our country must continue to invest the resources necessary to fulfill the promise of equal employment opportunity.

This statement begs the question: if employer discrimination is a national problem, why doesn’t the EEOC collect more money from employers?

I am sure the EEOC would argue if it had a larger budget and more resources, it could win more verdicts and settle more cases. Even so, this is the most aggressive EEOC in recent history, and it still does not litigate more than one percent of the charges filed.

The fact is that most employee litigation does not flow through the EEOC. Consequently, employers should not have a false sense of security that employees do not present a litigation risk…they do, and every employer should use risk management and loss prevention to curb the risk.

As for the conclusion about the risk from EEOC litigation:

* A very small percentage of employees bring EEOC charges;
* Of the charges filed, it is very unlikely the EEOC will litigate on behalf of the charging party; and
* Of the charges the EEOC does litigate, there is no guarantee the EEOC will win.

With that in mind, you should follow the advice of your counsel, but consider the following if you receive an EEOC charge:

* If the facts are unclear about whether discrimination occurred, employers should “think twice” before paying more than nuisance value when brought into the EEOC conciliation process.
* If discrimination has occurred, it is a smart business practice to use the EEOC conciliation process to negotiate a settlement.
* If systemic discrimination is alleged or multiple victims bring charges over the same matter, it is a smart business practice to use the conciliation process to negotiate a settlement.
* If discrimination did not occur and the facts are in your favor, listen to counsel; evaluate the costs, and know that the odds are the EEOC will not litigate against you. The employee may, but the government usually stays on the sideline.

63 Emerging Risks No One is Talking About

emerging riskEverybody knows about climate change and catastrophes, the Internet of Things and the cloud, the on-demand economy and online shopping, autonomous vehicles and robots in the workplace, terrorism and pandemics, 3-D printing and cyber theft, and political instability and economic uncertainty. Insurance professionals have been talking about these and many other emerging risks for years.

But what’s lurking in the shadows? What insurance and organizational risks of the immediate or distant future are being overlooked? What are the risks facing organizations that are flying under the radar?

  1. Innovation follows manufacturing. The idea that innovation happens in one place—Silicon Valley—while manufacturing happens in another—China—is unsustainable. If all the manufacturing is happening in China, a lot of the innovation will happen there, too. (“Making Innovation,” MIT Technology Review, Sept. 16, 2014 by Nanette Byrnes)
  2. Narcissistic executives. Narcissistic CEOs are more likely to engage in risky business practices. (“Talent Risk: A Killer Torpedo,” Carrier Management, Dec. 31, 2013; “CEO Narcissism, Accounting Quality, and External Audit Fees,” May 11, 2015 by J. Scott Judd, University of Arizona; Kari Joseph Olsen, Utah State University; James Stekelberg, University of Arizona)
  3. Digital disengagement. More and more people opt out of social networking and the digital world, refusing to share data. (“Swiss Re SONAR: New emerging risk insights,” page 15)
  4. Predictive model backlash. As insurers use more predictive models, more people allege discrimination. One social media complaint spreads instantaneously.
  5. Extreme carrier consolidation. Larger carriers utilize their superior data and analytics capabilities to wipe out smaller ones. This reduces competitions and increases rates.
  6. Obesity as a disability. With obesity classified as a disability, expect reasonable accommodation, disability discrimination and harassment claims.
  7. Autism liability. Environmental contaminants could be responsible for a large number of autism cases. (“Possible Environmental Cause of Autism Discovered,” GenRe blog item posted Oct. 30, 2013 by Charlie Kingdollar)
  8. Super materials. Graphene could eventually replace steel and can be used to turn on lightbulbs. What about electric cars? Shrilk, made from leftover shrimp shells, is useful for sutures or growing new tissue. Lotus leaves are used to make waterproof paints and textiles. (“Extreme Graphene and the Coming Super Materials Gold Rush,”, Oct. 27, 2014 by Tom Frey; “The Super Supercapacitor,” directed by Brian Golden Davis on Vimeo; “Hold on. My Phone Says I’m Having a Heart Attack: Top Tech Trends Revealed,” Carrier Management, Nov. 19, 2014)
  9. More super materials. An ultra-thin invisibility cloak made of microscopic rectangular gold blocks can render objects undetectable with visible light. The technology eventually could be used for military applications—disappearing vehicles, aircraft, soldiers. What about civilian life? (Now you see it, now you don’t: invisibility cloak nears,” Reuters, Sept. 17, 2015 by Will Dunham)
  10. Communication Tower with Antennas isolated on white background. 3D renderCell tower worker safety. Communications tower climbing has a death rate roughly 10 times that of construction. (“In Race For Better Cell Service, Men Who Climb Towers Pay With Their Lives,” ProPublica, May 22, 2012 by Ryan Knutson, PBS Frontline, and Liz Day, ProPublica)
  11. Habit-forming technologies. Technologies aimed at forging new habits have been used by casinos and cigarette makers for years. Today, the business model is open to a broad range of companies. (“Technology and Persuasion,” MIT Technology Review, March 23, 2015 by Nanette Byrnes)
  12. Sophisticated fraud. Today’s controls will not detect tomorrow’s fraud. Insurers lack red flags for new types of schemes. (“White paper: Emerging issues,” Coalition of Insurance Fraud at
  13. Multitasking employees. Less-focused employees are less productive. (“The high cost of multitasking that you weren’t aware of,” Tumotech, March 16, 2014 by Chuck Tesla)
  14. Activist investors. They use sophisticated methods to target companies, even high-performing ones. (“Taking the Full View: the Four “P’s” of Pay for Performance and Why They Matter to Investors,” C-Suite Insight, Issue 15 2014 published by Equilar; “It’s Not Your Imagination, Activism Has Grown,” Bloomberg BNA, Aug. 31, 2015)
  15. Graying corporate directors. The average age of directors of companies in the S&P 1500 index is 64. (“Age and Tenure in the Boardroom,” published by Equilar)
  16. Coaching the wrong team. Too many executives invest their limited time trying to “fix what is broken” instead of investing in their highest-performing people. (“Avoid the five talent management mistakes that put companies at risk,” C-Suite Insight, Issue 15 2014, published by Equilar)
  17. Outdated job descriptions. Failing to redefine jobs as the company strategy evolves and new hires assume responsibilities. (“Avoid the five talent management mistakes that put companies at risk,” C-Suite Insight, Issue 15 2014, published by Equilar)
  18. Board’s role in overseeing risk. Investors expect boards to mitigate the risks associated with strategic business decisions. (“Game of Guidance: The Critical Role of Boards in Overseeing Risk,” by Belen E. Gomez, C-Suite Insight, Issue 15 2014 published by Equilar)
  19. Weakening of state regulation. As federal and foreign governments assume more of a role, state regulation loses influence.
  20. Occupational licensing. States’ licensing requirements cost jobs and raise prices while not delivering on health and safety. (“Occupational Licensing: A Framework For Policymakers,” July 2015, The White House)
  21. Dementia in the C–suite. Dementia rates may be declining, but only for younger Americans. (“Why Your Risk for Dementia May Be Lower Than Your Parents’ and Grandparents,’” HealthDay, July 24, 2015 by Amy Norton)
  22. Scheduling stress. Planning work around personal, family and community needs gets more difficult every day.
  23. Employee financial fitness. Attention is paid to health wellness, but financial stress can affect performance. (
  24. Personal and small commercial blend. Work-at-home, ridesharing, home sharing all demand a new type of policy.
  25. Solar storms. The probability of a solar storm doing damage could be as high as 12 percent. (“Time to be afraid: Preparing for the next big solar storm: Kemp,” Reuters, July 25, 2014 by John Kemp)
  26. Vertical cities. Giant vertical urban skyscraper projects are booming in Asian and Arab cities. They could be vulnerable to energy failures and spreading of disease. (“Swiss Re SONAR: New emerging risk insights,” page 19; “Pushing the limits—Managing risk in a faster taller, bigger world,” CRO Forum, Emerging Risk Initiative—Position Paper)
  27. Digital payment systems. New apps like Venmo and Dwolla are a challenge to banks and credit card firms and could raise security risks. (“Technology Repaints the Payment Landscape,” MIT Technology Review, Jan. 26, 2015 by Nanette Byrnes)
  28. Corruption abroad. Pressure to grow in emerging markets leads companies to avoid addressing corruption risks, especially in Africa and BRIC nations. (“Six fraud and corruption trends for 2014,” CMGA magazine, Jan. 9, 2014 by Neil Amato)
  29. Hard and easy workers comp. Underwriters flock to the favored comp classes with good loss experience; less competition for harder-to-place employers will bring upward rate pressure on loss-sensitive programs. (“Top 10 Casualty Insurance Trends for 2015: Marsh,” Insurance Journal, Dec. 17, 2014)
  30. Faulty laws on fraud. Anti-fraud laws and evidence requirements vary by country and state, making enforcement more difficult and raising costs in multijurisdictional crimes. (“White paper: Emerging issues,” Coalition of Insurance Fraud at
  31. Data-savvy customers. Just as companies are using data to sell, consumers are also using data and analytics to make buying decisions.
  32. Skilled labor shortages. Finding skilled workers is a major concern of small businesses. (2015 Travelers Business Risk Index)
  33. A stethoscope and American money on a white background - Healtcare cost conceptMedical cost inflation. More respondents (60 percent) are worried about medical cost inflation than about any of the other risks in the 2015 Travelers Business Risk Index.
  34. Landlord liability. More and more property owners try to cash-in on the booming residential rental market. But do they know their responsibilities?
  35. De-globalization. A growing trend in some regions in favor of nationalist and interventionist policies. (“Swiss Re SONAR: New emerging risk insights,” page 8)
  36. LED dangers. LED lights are growing in popularity over incandescent and fluorescent lamps. But some question the health effects of their blue waves, especially at night. (“Swiss Re SONAR: New emerging risk insights,” page 28)
  37. Home brewing. Beyond brewing beer, new technology makes mixing powerful cocktails—even inhalable drinks—in the privacy of home easy and fun. (
  38. 3-D intellectual property. Lessons from the music industry as 3-D printing takes hold. (“Protecting IP from 3D Printing: What Companies Need to Know,strategy+business, April 2, 2015 by Matt Palmquist)
  39. Flaming foam. HBCD applied to popular polystyrene foam insulation to make it fire-resistant can be highly toxic and carcinogenic. (“China Leads Fire Safety Regulations with a New Fire Code,” XL Catlin Fast Fast Forward, July 29, 2015 by Tony Wu)
  40. Corporate secrets. Hackers are targeting people with access to insider data that can be used to profit on trades before that data is made public. (“Cyber ring stole secrets for gaming U.S. stock market-FireEye,“ Reuters/CM, Dec. 1, 2014 by Jim Finkle)
  41. Jailhouse risk. Wrongful incarceration suits raise insurance coverage issues. (“Wrongful Incarceration Suits Surge Giving Rise to Insurance Coverage Trigger Issues,” Carrier Management, Nov. 3, 2013)
  42. Fertility liability. Courts are struggling to define fertility clinics’ responsibilities to divorced couples and to decide who owns an embryo. (“After A Divorce, What Happens To A Couple’s Frozen Embryos,” NPR, Aug. 22, 2015 by Jennifer Ludden)
  43. Death industry risk. People can choose when, where and how to end their lives. Suicide assistance organizations, suicide tourism, human remains composting and digital memorials are growing. (“Swiss Re SONAR: New emerging risk insights,” page 16
  44. Worker depression. Rates vary by industry and position, but 6 percent of professional workers and nurses report having or being treated for depression. (“U.S. Managers Have Low Rates of Depression in 2014, Gallup website, April 15, 2015 by Rebecca Riffkin)
  45. The Decline of the COO. Is it time to add chief operating officers to the list of endangered species? (“The Decline of the COO,” strategy+business, May 4, 2015 by Gary L. Neilson)
  46. Medical and litigation funding. A rising number of firms are covering litigation and medical costs for plaintiffs in product liability lawsuits in exchange for a share of the class action settlement. Rates are sure to rise.
  47. Foodborne illness. Genome sequencing is making it possible to more quickly and accurately track a foodborne illness to its source. Food recalls could increase, and the manufacturers responsible will be held accountable. (“FDA wants food companies to hand over their pathogens,” Reuters/IJ, Aug. 27, 2015 by Julie Steenhuysen)
  48. Franchise liability. Franchises like McDonald’s and contractors including staffing agencies are considered joint employers under a new National Labor Relations Board standard and thus responsible for working conditions. Are new EPLI exposures looming? (“Union Wins Closely Watched Labor Case Over Who’s the Boss,” Bloomberg/IJ, Aug. 27, 2015 by Jim Snyder)
  49. Overlapping occupational risks. Particular characteristics—such as being an immigrant/foreign-born worker, a worker under the age of 25 or an employee of a small business—can increase an individual’s risk for workplace injury or illness. When a worker has two or more of these characteristics, the risk is compounded. (“Overlapping Vulnerabilities,” CDC website, NIOSH Science blog, Aug. 28, 2015 by Deborah Hornback, MS; Thomas Cunningham, PhD; and Rebecca J. Guerin, MA)
  50. Shopping while driving. Carmakers are partnering with retailers and bankers to offer dashboard apps so drivers can shop and bank while behind the wheel. (“Cars Become Target for Identity Theft as Shopping Hits Dashboard,” Bloomberg/IJ, Aug. 27, 2015 by Keith Naughton and Olga Kharif)
  51. Failure to disclose. Improperly disclosing risks to shareholders is an overlooked risk, and insurers are among the companies failing to disclose. (“Inadequate Shareholder Disclosure and Other Killer Risks,” Carrier Management, Jan. 15, 2014)
  52. Payoff for living in a quake zone. A Dutch court said a gas producer must compensate homeowners for falls in the value of their properties due to earthquakes linked to gas production. Will other courts follow? (“Dutch court: gas producer NAM must compensate homeowners in quake zone,” Reuters, Sept. 2, 2015 by Toby Sterling)
  53. Worker deaths on the rise. Oil and gas industry workers are particularly vulnerable. (“U.S. Workplace Fatalities Likely at Highest Level Since 2008,” Wall Street Journal, Sept. 17, 2015 by Alexandra Berzon)
  54. Genome data: There’s an app for that. Networks of genome data could spur breakthroughs for decoding rare diseases, but there are risks associated with an Internet of DNA and an app store designed to make consumer genomics part of the Internet mainstream. (“Internet of DNA,” MIT Technology Review, 10 Breakthrough Technologies 2015 series; “Inside Illumina’s Plans to Lure Consumers with an App Store for Genomes,” Aug. 19, 2015 by Antonio Regalado)
  55. Asbestos exposure linked to digestive tract cancers. Scientific research is finding asbestos disease beyond lung cancer and mesotheliomas. (“New Paper: ‘Digestive and occupational cancers asbestos exposure: impact study in a cohort of asbestos plant workers,’” Global Tort website, Aug. 31, 2015 by Kirk Hartley; “Genetic Markers May Fuel Next Wave of P/C Insurer Asbestos Reserve Hikes,” Carrier Management, July 29, 2015)
  56. Smart drugs. A drug that improves decision-making, problem-solving and creativity has no “short-term” negative effects like Ritalin. Are there more to come? What about the long term? (“Narcolepsy medication modafinil is world’s first safe ‘smart drug,’” The Guardian, Aug. 20, 2015 by Helen Thomson)
  57. Social media pressure for recalls. A video on Facebook had moms up in arms about specks of glass in Huggies wipes. Will companies speed recalls to silence the critics? (“Moms seek recall of Huggies wipes after particles found,” USA Today, Aug. 25, 2015)
  58. Happy couple taking selfie with selfie stick at the beachSelfie deaths. More people died this year trying to take a selfie than from shark attacks, according to some reports. The latest occurred at the Taj Mahal. (“Tourist reportedly dies at Taj Mahal while taking a selfie,”, Sept. 18, 2015, by Chris Matyszczyk; “What Are the Odds? Long, Most Likely,” Wall Street Journal, Aug. 14, 2015 by Jo Craven McGinty)
  59. Crowdsourcing liability. Vast networks of people solving global problems or performing micro-tasks for little or no financial reward could fuel labor lawsuits and increase infringement risks. (“Instagram, Crowdsourcing and the New Risks of Emerging Technology,” Carrier Management, April 7, 2014)
  60. Deadly superbugs. Endoscopes are spreading bacteria. Are other medical devices safe? (“FDA Issues Warning to Scope Makers Over Spread of Deadly Superbugs,” Bloomberg/IJ, Aug. 17, 2015 by John Tozzi) 
  61. Gaming the workers comp system. Is that carpal tunnel case or torn tendon really a work-related claim? It could be too much tweeting or smartphone game-playing. (“Man Tears Tendon After Playing ‘Candy Crush’ for Weeks,” website, April 13, 2015 by Rachael Rettner) 
  62. Short-termism. The perceived excessive focus of businesses on short-term results rather than long-term value creation. It’s an issue for directors and officers liability. (“The Short-Termism Debate: Are There D&O Liability Risks Involved Too?” D&O Diary, Aug. 8, 2015, published by Kevin M. LaCroix)
  63. Self-driving golf cart. Will executives take out their frustrations on other players rather than by driving the cart into the water hazard? (